Half-year Report

RNS Number : 6266O
Jersey Electricity PLC
21 May 2018
 

  Jersey Electricity plc      

       Interim Management Report

            for the six months ended 31 March 2018

                                                                                                       

 

The Board approved at a meeting on 18 May 2018 the Interim Management Report for the six months ended 31 March 2018 and declared an interim dividend of 6.1p compared to 5.8p for 2017. The dividend will be paid on 29 June 2018 to those shareholders registered in the records of the Company at the close of business on 1 June 2018.

 

The Interim Management Report is attached and will be available to the public on the Company's website www.jec.co.uk/about-us/investor-relations/financial-figures-and-reports.

The Interim Management Report for 2018 has not been audited or reviewed by our external auditors nor have the results for the equivalent period in 2017. The results for the year ended 30 September 2017 have been extracted from the statutory accounts. The auditor has reported on those accounts and their reports were unmodified. 

 

  

M.P. Magee                                                               P.J. Routier

Finance Director                                                       Company Secretary

 

Direct telephone number : 01534 505201                  Direct telephone number : 01534 505253

Email : mmagee@jec.co.uk                                       Email : proutier@jec.co.uk

 

18 May 2018

 

 

 

The Powerhouse,

PO Box 45,

Queens Road,

St Helier,

Jersey JE4 8NY

 

 

 

 

 

 

 

Jersey Electricity plc

Unaudited Interim Management Report

for the six months to 31 March 2018

 

Financial Summary

6 months

2018

6 months

2017

Electricity Sales in kWh (000)

368,200

361,123

Revenue

£60.5m

£58.0m

Profit before tax

£  9.7m

£  8.9m

Earnings per share 

  24.9p

  22.9p

Final dividend paid per ordinary share

    8.4p

    8.0p

Proposed interim dividend per ordinary share

    6.1p

    5.8p

Net debt

£20.2m

£29.4m

 

Overall trading performance

Group revenue, at £60.5m, was 4% higher for the first half of 2018 than the same period in 2017 with £1.0m coming from a higher level of unit sales of electricity and £0.8m from our Powerhouse.je retailing business. Profit before tax was £9.7m being £0.8m ahead of the equivalent period last year and remains at a level commensurate with a sustainable rate of return typical for a regulated utility and at a quantum needed to maintain our continued investment in infrastructure. Cost of sales at £37.5m was £2.0m higher than last year with an increase in import costs in our Energy business and higher sales activity in Powerhouse.je being the main reasons. Operating expenses at £12.6m were £0.4m lower than in 2017 due to a general reduction in overhead costs. The taxation charge in the period of £2.0m was £0.1m higher than during the same period in 2017 due to increased profits. Earnings per share rose to 24.9p from 22.9p in 2017. Net debt on the balance sheet at 31 March 2018 was £20.2m (2017: £29.4m) compared to £21.9m at our last year end on 30 September 2017.     

 

Energy performance

Unit sales of electricity rose 2%, from 361m to 368m kWh, compared with last year. The average temperature was mixed with the first quarter being milder, and the second quarter colder, than in the first half of the 2017 financial year. On 1 March we saw our highest ever maximum demand for electricity of 178 MW, when temperatures fell to a very unseasonal minus 3 degrees centigrade, being 11% higher than the previous record of 161 MW experienced in 2012. Revenues in our Energy business at £47.2m were £1.0m higher than in 2017. Operating profit at £8.7m was £1.0m higher than in the same period last year. Gross margin was impacted by increased imported electricity costs but other costs, such as manpower and maintenance were lower than the corresponding 2017 period. We imported 95% of our on-Island requirement from France (2017: 93%) and 5% from the Energy from Waste plant (2017: 5%), owned by the States of Jersey. Only 0.3% (1m units) of electricity was generated in Jersey using our own plant (2017: 2%) due to the availability of three subsea cables to France for the first full winter period post the commissioning of our third interlink, Normandie 1, in December 2016.

 

Investment in infrastructure

Capital expenditure was £7.1m in the first 6 months of the financial year compared to £8.6m in the same period last year. We continue with work on our new West of St Helier Primary sub-station which has an estimated cost of £17m, of which £10m has been expended to date, and is still planned to be commissioned in late 2018. Finally, our rollout of smart-enabled meters continues with around 39,000 installed in customer premises as at 31 March 2018 representing over 78% of our customer base.       

 

 

Non-Energy performance

Year-on-year revenue in our retail business, Powerhouse.je, rose by 11% to £7.9m (2017: £7.1m) and profits rose 23% to £0.6m in what is a very competitive marketplace, both locally and off-island. Revenue and profit rose for our Property portfolio as a result of increased rental flows (profit up 5% to £0.9m). JEBS, our contracting and business services unit, saw a £0.2m increase in overall revenue to £3.1m but delivered a break-even position, down from a £0.1m profit in 2017 in a tight local market. Our remaining business units produced profits of £0.3m being £0.1m behind the same period in 2017. 

 

Forward hedging of electricity and foreign exchange, and customer tariffs

We continue to focus on delivering secure low-carbon electricity supplies and stable customer tariffs. Through the use of our power purchase contract and hedging policies, this has been successfully achieved whilst maintaining an appropriate and fair return for our shareholders. Our electricity purchases are materially, albeit not fully, hedged for the period 2018-21. As these are contractually denominated in the Euro we enter into forward foreign currency contracts to reduce the volatility of our cost base and aid tariff planning. We have continued to see volatility in foreign exchange in the last six months against the Euro primarily driven by the uncertainty surrounding the UK Brexit decision, which is why we seek to manage this exposure. In April 2018 we announced a  below inflation average rise in tariffs of 2%, from 1 June, largely driven by a weakening of sterling relative to the Euro and other inflationary factors. Customer tariffs last rose in April 2014 by 1.5%.

 

Debt and financing

The net debt figure fell to £20.2m at 31 March 2018 compared to £29.4m at this time last year (and £21.9m at 30 September 2017). After a high level of capital spending on undersea cables, and associated infrastructure, over recent years, the level of expenditure and associated net debt in this current year, has fallen. It is the aim of the Board that Jersey Electricity continues to maintain a prudent level of debt relative to our overall balance sheet, which remains strong.

 

Pension scheme

The defined benefit pension scheme deficit (without deduction of deferred tax) on our balance sheet at 31 March 2018, at £3.9m, was similar to the £4.2m level at 30 September 2017 (and a deficit of £4.8m at 31 March 2017). Since the last financial year end, scheme assets rose by £4m (to £133m) and liabilities also increased by £4m (to £137m). This increase in scheme liabilities is due to a decrease in relevant AA-rated bond yields partially offset by a decrease in assumed RPI inflation. Cash paid into the scheme during the six month period was £0.9m (2017: £1.0m) with the IAS 19 charge against profit being £1.6m (2017: £1.8m). The defined benefit scheme has been closed to new members since 2013.

 

Dividend

Your Board proposes to pay an interim net dividend for 2018 of 6.1p (2017: 5.8p). As stated previously we continue to aim to deliver sustained real growth each year over the medium-term. The final dividend for 2017 of 8.4p, paid in late March in respect of the last financial year, was an increase of 5% on the previous year.

 

Risk and outlook

The principal risks and uncertainties identified in our last Annual Report, issued in January 2018, have not materially altered in the interim period.

 

Your Board is satisfied that Jersey Electricity plc has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, we continue to adopt the going concern basis in preparing the condensed financial statements.

 

 

Responsibility statement

We confirm to the best of our knowledge:

 

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

 

(b) the Interim Directors Statement includes a fair review of the information required by the Disclosure and Transparency Rule DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

 

(c) the Interim Directors Statement includes a fair review of the information required by the Disclosure and Transparency Rule DTR 4.2.8R (disclosure of related party transactions and changes therein); and

 

(d) this half yearly interim report contains certain forward-looking statements with respect to the operations, performance and financial condition of the Group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this half yearly financial report and the Company undertakes no obligation to update these forward-looking statements. Nothing in this half yearly financial report should be construed as a profit forecast.

 

 

 

 

C.J. AMBLER - Chief Executive       M.P.MAGEE - Finance Director            18 May 2018

                                                        

                                                                    

 

 

INVESTOR TIMETABLE FOR 2018

 

  1 June

Record date for interim ordinary dividend

29 June

Interim ordinary dividend for year ending 30 September 2018

  2 July

Payment date for preference share dividends

14 December

Preliminary announcement of full year results

 

 

 

 

 

 

 

 

Condensed Consolidated Income Statement (Unaudited)

 

 

 

 

Six months ended                

31 March

Six months ended                

31 March

 

Year ended

30 September

 

 

 

Note

 

2018

£000

 

2017

£000

 

2017

£000

 

 

 

 

 

 

 

 

Revenue

2

 

60,463

 

58,004

 

102,320

Cost of sales

 

 

(37,506)

 

(35,507)

 

(63,186)

Gross profit

 

 

22,957

 

22,497

 

39,134

Revaluation of investment properties

 

 

-

 

-

 

40

Operating expenses

 

 

(12,553)

 

(12,981)

 

(24,379)

Group operating profit

2

 

10,404

 

9,516

 

14,795

Finance income

 

 

7

 

1

 

3

Finance costs

 

 

(707)

 

(588)

 

(1,340)

Profit from operations before taxation

 

 

9,704

 

8,929

 

13,458

Taxation

3

 

(2,023)

 

(1,925)

 

(2,834)

Profit from operations after taxation

 

 

7,681

 

7,004

 

10,624

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

Owners of the Company

 

 

7,640

 

7,009

 

10,599

Non-controlling interests

 

 

41

 

(5)

 

25

 

 

 

 

 

 

 

 

Profit for the period/year attributable to the equity holders of the parent Company

 

 

7,681

 

7,004

 

 

10,624

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

   -     basic and diluted

 

 

24.9p

 

22.9p

 

34.6p

                 

 

Condensed Consolidated Statement of Comprehensive Income (Unaudited)

 

 

 

 

Six months ended

31 March

Six months ended

31 March

 

Year ended

30 September

 

 

 

2018

£000

 

2017

£000

 

2017

£000

 

 

 

 

 

 

 

 

Profit for the period/year

 

 

7,681

 

7,004

 

10,624

 

 

 

 

 

 

 

 

Items that will not be reclassified subsequently to

profit or loss:

 

 

 

 

 

 

 

Actuarial gain on defined benefit scheme

 

 

964

 

7,547

 

8,859

Income tax relating to items not reclassified

 

 

(193)

 

(1,509)

 

(1,772)

 

 

 

771

 

6,038

 

7,087

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit

or loss:

 

 

 

 

 

 

 

Fair value loss on cash flow hedges

 

 

(3,407)

 

(2,387)

 

(1,673)

Income tax relating to items that may be reclassified

 

 

681

 

477

 

335

 

 

 

(2,726)

 

(1,910)

 

(1,338)

 

 

 

 

 

 

 

 

Total comprehensive income for the period/year

 

 

5,726

 

11,132

 

16,373

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

Owners of the Company

 

 

5,685

 

11,137

 

16,348

Non-controlling interests

 

 

41

 

(5)

 

25

 

 

 

5,726

 

11,132

 

16,373

 

 

 

 

Condensed Consolidated Balance Sheet (Unaudited)

 

 

Note

 

As at 31 March

2018

£000

 

As at 31 March

2017

£000

 

As at 30 September

2017

£000

Non-current assets

 

 

 

 

 

 

 

Intangible assets

 

 

1,077

 

189

 

1,110

Property, plant and equipment

 

 

212,401

 

210,597

 

211,921

Investment property

 

 

20,150

 

20,110

 

20,150

Trade and other receivables

 

 

533

 

622

 

592

Derivative financial instruments

6

 

593

 

3,807

 

2,790

Other investments

 

 

5

 

5

 

5

 

 

 

 

 

 

 

 

Total non-current assets

 

 

234,759

 

235,330

 

236,568

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Inventories

 

 

6,618

 

5,736

 

6,825

Trade and other receivables

 

 

21,559

 

20,571

 

15,782

Derivative financial instruments

6

 

3,337

 

2,891

 

4,454

Cash and cash equivalents

 

 

9,767

 

4,556

 

8,076

 

 

 

 

 

 

 

 

Total current assets

 

 

41,281

 

33,754

 

35,137

 

 

 

 

 

 

 

 

Total assets

 

 

276,040

 

269,084

 

271,705

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and other payables

 

 

14,147

 

13,058

 

15,885

Borrowings

 

 

-

 

4,000

 

-

Derivative financial instruments

6

 

8

 

13

 

-

Current tax payable

 

 

2,813

 

1,166

 

1,034

 

 

 

 

 

 

 

 

Total current liabilities

 

 

16,968

 

18,237

 

16,919

 

Net current assets

 

 

 

24,313

 

 

15,517

 

 

18,218

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

 

21,820

 

20,751

 

20,177

Retirement benefit deficit

 

 

3,855

 

4,764

 

4,219

Derivative financial instruments

6

 

257

 

327

 

172

Financial liabilities - preference shares

 

 

235

 

235

 

235

Borrowings

 

 

30,000

 

30,000

 

30,000

Deferred tax liabilities

 

 

23,490

 

21,992

 

23,719

 

 

 

 

 

 

 

 

Total non-current liabilities

 

 

79,657

 

78,069

 

78,522

 

 

 

 

 

 

 

 

Total liabilities

 

 

96,625

 

96,306

 

95,441

 

 

 

 

 

 

 

 

Net assets

 

 

179,415

 

172,778

 

176,264

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

 

 

1,532

 

1,532

 

1,532

Revaluation reserve

 

 

5,270

 

5,270

 

5,270

ESOP reserve

 

 

(61)

 

(119)

 

(84)

Other reserves

 

 

2,932

 

4,968

 

5,658

Retained earnings                                                      

 

 

169,700

 

161,119

 

163,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity attributable to owners of the Company

 

 

179,373

 

172,770

 

176,238

 

 

 

 

 

 

 

 

Non-controlling interests

 

 

42

 

8

 

26

 

 

 

 

 

 

 

 

Total equity

 

 

179,415

 

172,778

 

176,264

 

 

 

 

 

Condensed Consolidated Statement of Changes in Equity (Unaudited)

 

 

Share

Revaluation

ESOP

Other

Retained

Total

 

reserve

reserve

reserves

earnings

reserves

 

£000

£000

£000

£000

£000

 At 1 October 2017

1,532

5,270

(84)

5,658

163,862

176,238

 Total recognised income and expense for the period

-

-

-

-

7,640

7,640

 Funding of employee share scheme

-

-

(9)

-

-

(9)

 Amortisation of employee share scheme

-

-

32

-

-

32

 Unrealised loss on hedges (net of tax)

-

-

-

(2,726)

-

(2,726)

 Actuarial gain on defined benefit scheme (net of tax)

-

-

-

-

771

771

 Equity dividends paid

-

-

-

-

(2,573)

(2,573)

 At 31 March 2018

1,532

5,270

(61)

2,932

169,700

179,373

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 At 1 October 2016

1,532

5,270

(155)

6,878

150,523

164,048

 Total recognised income and expense for the period

-

-

-

-

7,009

7,009

 Amortisation of employee share scheme

-

-

36

-

-

36

 Unrealised loss on hedges (net of tax)

-

-

-

(1,910)

-

(1,910)

 Actuarial gain on defined benefit scheme (net of tax)

-

-

-

-

6,038

6,038

 Equity dividends paid

-

-

-

-

(2,451)

(2,451)

 At 31 March 2017

1,532

5,270

(119)

4,968

161,119

172,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 At 1 October 2016

1,532

5,270

(155)

6,878

150,523

164,048

 Total recognised income and expense for the year

-

-

-

-

10,599

10,599

 Funding of employee share scheme

-

-

(2)

-

-

(2)

 Amortisation of employee share scheme

-

-

73

-

-

73

 Unrealised loss on hedges (net of tax)

-

-

-

(1,338)

-

(1,338)

 Actuarial gain on defined benefit scheme (net of tax)

-

-

-

-

7,087

7,087

 Adjustment to reserves

-

-

-

118

(118)

-

 Equity dividends paid

-

-

-

-

(4,229)

(4,229)

 At 30 September 2017

1,532

5,270

(84)

5,658

163,862

176,238

 

Condensed Consolidated Cash Flow Statement (Unaudited)

 

 

 

As at 31 March

2018

£000

 

As at 31 March

2017

£000

 

As at 30 September

2017

£000

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

10,404

 

9,516

 

14,795

    Depreciation and amortisation charges

 

5,458

 

5,151

 

10,695

    Share-based reward charges

 

32

 

36

 

73

    Gain on revaluation of investment property

 

-

 

-

 

(40)

    Pension operating charge less contributions paid

 

654

 

840

 

1,607

    Payment for foreign exchange option

 

250

 

-

 

-

    Loss/(profit) on sale of fixed assets

 

-

 

42

 

(4)

 

 

 

 

 

 

 

Operating cash flows before movements in working capital

 

16,798

 

15,585

 

27,126

Working capital adjustments:

 

 

 

 

 

 

     Decrease/(increase) in inventories

 

207

 

226

 

(863)

     (Increase)/decrease in trade and other receivables

 

(5,718)

 

(3,928)

 

892

     Increase/(decrease) in trade and other payables

 

1,017

 

(1,414)

 

1,230

Net movement in working capital

 

(4,494)

 

(5,116)

 

1,259

Interest paid

 

(703)

 

(590)

 

(1,322)

Capitalised interest paid

 

-

 

(172)

 

(172)

Preference dividends paid

 

(4)

 

(4)

 

(9)

Income taxes paid

 

-

 

-

 

(421)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash flows generated from operating activities

 

11,597

 

9,703

 

26,461

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

(6,914)

 

(8,508)

 

(14,252)

Investment in intangible assets

 

(137)

 

(63)

 

(836)

Net proceeds from disposal of fixed assets

 

-

 

3

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

(7,051)

 

(8,568)

 

(15,084)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity dividends paid

 

(2,573)

 

(2,451)

 

(4,229)

Dividends paid to non-controlling interest

 

(25)

 

(39)

 

(59)

Deposit interest received

 

7

 

1

 

3

Payment for foreign exchange option

 

(250)

 

-

 

-

Proceeds from borrowings

 

-

 

18,000

 

18,000

Repayment of borrowings

 

-

 

(14,000)

 

(18,943)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash (used in) / generated from financing activities

 

(2,841)

 

1,511

 

(5,228)

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

1,705

 

2,646

 

6,149

Cash and cash equivalents at beginning of period/year

 

8,076

 

1,925

 

1,925

Effect of foreign exchange rate changes

 

(14)

 

(15)

 

2

 

 

 

 

 

 

 

Net cash and cash equivalents at end of period/year

 

9,767

 

4,556

 

8,076

 

 

 

 

 

 

 

Notes to the Condensed Interim Accounts (Unaudited)

 

1.         Accounting policies

 

Basis of preparation

The interim financial statements for the six months ended 31 March 2018 have been prepared on the basis of the accounting policies set out in the 30 September 2017 annual report and accounts using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard 34 'Interim Financial Reporting'. There have been no changes to accounting standards during the current financial year that would be expected to impact the disclosures in these financial statements, nor the full year financial statements that will be prepared for 30 September 2018.

 

The directors have a reasonable expectation that the Group (being the Company, Jersey Electricity plc and its subsidiary, Jersey Deep Freeze Ltd) has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the interim financial statements.

 

2.         Revenue and profit

 

The contributions of the various activities to Group revenue and profit are listed below:

 

           

Six months ended

31 March 2018

Six months ended

31 March 2017

 

Year ended

30 September 2017

 

 

External

Internal

Total

External

Internal

Total

External

Internal

Total

Revenue

£000

£000

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

Energy

47,174

64

47,238

46,150

70

46,220

80,480

143

80,623

Building Services

2,865

249

3,114

2,413

472

2,885

3,982

915

4,897

Retail

7,912

17

7,929

7,102

16

7,118

13,045

37

13,082

Property

1,115

305

1,420

1,088

299

1,387

2,187

599

2,786

Other

1,397

390

1,787

1,251

915

2,166

2,626

1,324

3,950

 

60,463

1,025

61,488

58,004

1,772

59,776

102,320

3,018

105,338

Intergroup elimination

 

 

(1,025)

 

 

(1,772)

 

 

(3,018)

Revenue

 

 

60,463

 

 

58,004

 

 

102,320

 

 

 

 

 

 

 

 

 

 

Operating profit

 

 

 

 

 

 

 

 

 

Energy

 

 

8,667

 

 

7,694

 

 

11,723

Building Services

 

 

(13)

 

 

104

 

 

131

Retail

 

 

567

 

 

460

 

 

731

Property

 

 

913

 

 

870

 

 

1,645

Other

 

 

270

 

 

388

 

 

525

 

 

 

10,404

 

 

9,516

 

 

14,755

 

 

 

 

 

 

 

 

 

 

Revaluation of investment properties

 

 

-

 

 

-

 

 

40

 

 

 

 

 

 

 

 

 

 

Operating profit

 

 

10,404

 

 

9,516

 

 

14,795

 

Materially, all of the Group's operations are conducted within the Channel Islands. All transactions between divisions are on an arm's-length basis. The assets and liabilities of the Group are not reported on as there has been no significant movement in the values in the six months to 31 March 2018.

 

 

3.         Taxation

 

 

Six months ended          31 March

 

Year ended

30 September

 

2018

£000

 

 

2017

£000

 

 

2017

£000

 

Current income tax                  

1,771

 

1,166

 

1,034

Deferred income tax

252

 

759

 

1,800

2,023

 

1,925

 

2,834

 

For the period ended 31 March 2018 and subsequent periods, the Company is taxable at the rate applicable to utility companies in Jersey of 20% (2017: 20%).

 

4.         Dividends paid and proposed

 

 

 Six months ended

    31 March

 

Year ended

30 September

 

2018

 

2017

 

2017

Dividends per share

 

 

 

 

 

   -     paid

8.4p

 

8.0p

 

13.8p

   -     proposed

6.1p

 

5.8p

 

8.4p

 

 

 

 

 

 

 

 

 

 

 

 

 

£000

 

£000

 

£000

Distributions to equity holders

2,573

 

2,451

 

4,228

                                                                                                           

The distribution to equity holders in respect of the final dividend for 2017 of £2,573,441 (8.4p net of tax per share) was paid on 29 March 2018.

 

The Directors have declared an interim dividend of 6.1p per share, net of tax (2017: 5.8p) for the six months ended 31 March 2018 to shareholders on the register at the close of business on 1 June 2018. This dividend was approved by the Board on 18 May 2018 and has not been included as a liability at 31 March 2018.

                       

5.         Pensions

 

In consultation with the independent actuaries to the scheme, the valuation of the pension scheme assets and liabilities has been updated to reflect current market discount rates, current market values of investments and actual investment returns applicable under IAS 19 'Employee Benefits', and consideration has also been given as to whether there have been any other events that would significantly affect the pension liabilities.

 

6.         Financial instruments

 

The Group held the following derivative contracts, classified as level 2 financial instruments at 31 March 2018. 

 

Fair value of currency hedges

 

31 March

 

30 September

 

 

2018

 

2017

 

2017

Derivative assets

 

£'000

 

£'000

 

£'000

Less than one year

 

3,337

 

2,891

 

4,454

Greater than one year

 

593

 

3,807

 

2,790

 

 

 

 

 

 

 

Derivative liabilities

 

 

 

 

 

 

Less than one year

 

(8)

 

(13)

 

-

Greater than one year

 

(257)

 

(327)

 

(172)

Total net assets

 

3,665

 

6,358

 

7,072

 

                                                                                                                       

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy. This hierarchy is based on the underlying assumptions used to determine the fair value measurement as a whole and is categorised as follows:

 

Level 1 financial instruments are those with values that are immediately comparable to quoted (unadjusted) market prices in active markets for identical assets or liabilities;

 

Level 2 financial instruments are those with values that are determined using valuation techniques for which the basic assumptions used to calculate fair value are directly or indirectly observable (such as to readily available market prices);

 

Level 3 financial instruments are shown at values that are determined by assumptions that are not based on observable market data (unobservable inputs).

 

The derivative contracts for foreign currency shown above are classified as level 2 financial instruments and are valued using a discounted cash flow valuation technique. Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.

                                                                                                                       

7.         Related party transactions

 

The Company conducts a variety of transactions with the States of Jersey and its associated entities:

 

 

 Value of    electricity  services supplied by Jersey Electricity

Value of goods  & other services supplied by Jersey Electricity 

Value of goods & services purchased by Jersey Electricity 

Amounts due to  Jersey Electricity 

Amounts due by  Jersey Electricity 

Six months ended 31 March

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

£000

£000

£000

£000

£000

£000

£000

£000

£000

£000

 

 

 

 

 

 

 

 

 

 

 

The States of Jersey and related entities

5,139

5,347

1,165

808

791

782

564

742

6

99

 

The States of Jersey is the Group's majority and controlling shareholder. Related entities include all corporatised entities that remain wholly owned by, or controlled by, the States of Jersey.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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